good morning good morning all right. welcome to san francisco

structures i don't actually know what annual year this is i'm producing this program but in one of my favorites i'm mary the publisherer of san francisco business times with our partner and entitled sponsor richard hanson and the sponsors i'll thank momentary we're delighted to be your host for a enlightening conversation you you know we're so blessed here with a continued economic boom and real estate boom here in san francisco being one of the month exciting stories to tell out there that's why we have a sell-out crowd thank you for being here this morning our managing editor jim is going to moderate a discussion with 4 developers on transformative

projects and vesting big on san francisco and dealing with the complexities that come with being a developer here in san francisco we'll get an update on their projects and their sight on follows the politics and the projects pursue and the economics shaping san francisco as well as that current development compliment and how they see the future and before we get to the discussion from the developers mayor ed lee is here and he'll give us a great tour a great you know kind of big picture at development centering on this very exciting southern waterfront and kind of take us on a visible tour and today, we'll talk about how san francisco is zealously with some of the tensions with all the gov. active growth and look at

it what are we are doing or should be doing to deal with the challenges of housing supply not meeting of the e meeting the needs and spom concerns and capacity of proficient transit with the congestion and the skyrocketing costs that make it difficult for companies so many wonderful things happening we're also in many ways a critical junction it is your to really determine our we have great minds we'll be looking at this morning so with some of the frustrations that come with the growth also a growing backlash against development and take on more serious tones at times so you know be developers can continue to grandparent with outlined

fees and new fees and new and outlined limitations and the need for policy is ever greater to match the growth of the tenure future so let's talk about what ifs we have much to discuss before we get to the discussion i 20789 thank our sponsors for making this event possible and a strong reality practice that has been our title and partners in a few moments welcoming remarks from jena partner at mullan in addition our sponsors thank you to kathy dinwitty and greg costco the leader of the company so many of the iconic buildings and projects all throughout the bay area and center california like one that is right now so many great projects that happen and

want to thank the northern california xaernts regional council robert is the executive director a great partner to to business and this industry and to the economy of san francisco so thank you to the carpenters council regional and robert and thank you to the smith and the architects and judy chu vice president of this group also has put you're the mark on so many of our iconic projects thank you and all of the supporting sponsors you'll see their logos on the screen and we appreciate everyone that is contributing to make this possible and many partners associations that are important to this industry and this city and i'll start with san francisco and ceo mark and i

promised mark because this is so important to industry i'll plug the beau moments that is striving to address the talent crush that is the real estate and building industry is experienced so if you'll check out and find ways to long term the workforce at at the sanford >> alliance for the employees and the reality trailed association and 70 state of all to recruit check if out it is such a necessary thing and i want to mark will take your cards if you want to know more about it and thank you to the other partnering the san francisco chamber of commerce and sandy's for kwhifks development and janice director

of spur and greg ceo and l l i executive director so thank you all we appreciate it you'll see our sponsor logos on the cover we've published the annual san francisco special edition but there are copies here for i today or get it online and san francisco business time is known for the strong covers on realtime in the bay area and our dealer annexations and additional i hope you're getting there are 5 times as much news than hits the print edition we have a dedicated commercial reality newsletter we partner with the journal and that's the reporting of two bay area reality torres us and others i hope you'll get to know them and you can sign up for any of

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business times team at their table give them your card and you'll save money and for 12 year outlined title for whiskey another drawing so many things to think about but all to get you assess to all the great concepts join the conversations today on social media at cash tag structure now get on with the program to open our program and set the stage for representatives please welcome jan the partner in the land use and shepherd our sponsor . >> (clapping.) >> good morning. >> thank you, mary wait good

morning okay. thank you. >> so as mary said i'm jennifer a land use participate at the shepard mullan a sponsor of the breakfast for many years i'm delighted to welcome everyone here this morning. >> i want to do something a little bit different i went back and looked at it through the business times headlines for 2016 and look at all of them an interesting journey i'll key up with a breech recap of the real estate holiness to remind us where we've been i hope this warms us up this is amongst other superbowl here we go 70 office market open a hot streak with why housing is a challenge for developers and buyers nor 2016 sf could be the epic center and skyrocketing

rents retrial court the tell the jury companies and supervisors the affordable housing will kill residential projects in february the headlines turned to oakland and oakland came into view oh, my god high-rise can add 3 thousand units no slow down and by spring is the sf mega project warriors super mission rock and super bay and we have one linked in and lennar got a bunch of headlines candle stick point an $8 million and treasure island 70 new $5 billion and the weapons base on the east bay and we also had oakland continues success oakland office

rent a new all times high not rosy for example, sf affordable housing infinitives and stuck in traffic 5 and 6 bay area residents think that will not ever get better by midsummer we're not sure if boom or bust and landlord see weakness and householders brace for the doubling and reorganizing economies sf has a condo with massive supply and dwindling demand by august we see mid market is getting more fire we have a long boom in history sf largest landlord bought the improvements move to build housing no oakland and the east bay tops the market and late

yesterday the investors move into buy 70 southern waterfront properties this bring us to september with our memories refreshed i hope you enjoy today's lively direction on behalf of shepherd and mullan hope you enjoy and thank you. >> (clapping.) >> if any of you take issue issue with any headlines our managing director will be on stage has nothing to do with to do with this pr we are as always delighted mayor ed lee takes his time tool join us at the event every year and shares his open and views and guides us through his vision of san francisco and

some of the challenges and opportunities ahead of us and today mayor ed lee is going to focus on the southern waterfront just wanted a tour of one of the most exciting transformative parts of the city mayor ed lee i appreciate you're a comment of innovation economy and know how hard you're working on housing and making sure we find good solutions to that for the transportations and so many of the things to start the economy vibrant please welcome san francisco mayor, mayor ed lee. >> (clapping.) >> thank you very much mary and thank you to the san francisco business times for the invitation to speak to all of you it is great to be here how do you like the fairmont hotel. >> (clapping.) >> i hope you get a change

chance to see somebody brand new in the front that skwurlt of tony bennet it is great reminder we're a city are changes and people have a rock star and dna and soul and everything this is attracting folks that symptom of tony bennet we've got the tradition in san francisco thank you for coming together this morning and being an audience i can speak to and mary suggested we have challenges do we have challenges? of course, of course, we do but it is fun to be with you and accomplish more of our city's oufshz and today, i want to speak a little bit about the future and specifically the future of our southern waterfront our southern bay front is what my staff tells me i got to make sure i say it is

the southern bay front 5 years ago i came to the office promising to lead us out of that great recession at the time and give the residents back to work and shore up the city's finances to make san francisco a solvent city and since then we have executed the business tax reform that spurred job growth and spurred the business development and mary said we encourage innovation we created more than one hundred thousand jobs and adopting a strong minimum wage we also made sure that our family leave policies are there thanks to all of you and universal health care has begun in our city our economy is now broad-based every sector is greek we're a global center for technology and

resurjsz and health care and tourism all the sectors are very active and we've seen marrow 11 thousand housing units in just the last two years 35 hundred of them permanently affordable another 8 thousand units are under construction today and now we are a city in a position of strength. and in the strong economic times we can't only plan for the future but actually invest in it >> san francisco has 29 and a half mile of shoreline and most is not changing in 20 years we'll still be circle at the ocean beach and bicycle and is strolling long fisherman's wharf but things are different along the bay front it has been

historical it is grown beyond the manufacturing roots and still lacks some of the essential amenities and services that every san francisco neighborhood deserves well, now with sixth new investment we have an opportunity to complete that astronomies to actually create great neighborhoods places alive with residents and families all over the place small businesses and church complete with transit and parks and manpower we have no less 9 major developments representing 20 thousand new householders and 35 thousand new jobs that are planned on there utilized waterfront properties in the southeast and my office is assuring all of the developments will work together we're managing all the projects under central strategies

stressing the values in a unified manner he each development will be unique and different the way they contribute to the city and county city will be similar and complimenty so i'm focused other than maximizing 6 key values in the southern bay front housing, jobs, open space, transportation, sea level rise and sustainability affordable housing is obviously a critical era we want investment in order to achieve 33 percent affordability across all of the projects that means that at least 6 thousand seven hundred units affordable housing along the southern bay front those developments projects will contribute diverse new employment opportunities in the

office in the pdr the production and subtraction repair and retail morning 35 thousand new jobs they're always work hand in hand with the city to protect the jobs that are already there we'll have over 5 hundred and 20 acres of new and renovated open space all that will be connected to the green blue trail and activated to events and programming transportation investment is a critical component of the existing and future communities along the southern bay front they'll be one $.5 billion worth of local transportation improvements and they're already currently underway more transit vehicles to make the rail lines more dependable and increased

tripped often the 23 and more projects online over the next decade how about a new ferry service and water taxi landing and accuracy electrification and crowning translation as we build wire addressing sea level rise and every new project will be built to 36 inches that is level to which california coastal waters are expected to rise over the next century and those projects will help us assure the longest investment along the sea level rise and waterfront and, of course, we expect the highest bar forville sustainability not just green buildings but district wide sustainability right now working out the complalz details of proposals that for things library gray and

backwater systems and center energy loops well, let's take a walk down the waterfront and look at the projects that will make achievement for all the values we have discussed that are possible at mission rock for example, the giants received over overwhelm support and achieve a record breaking 40 percent percentage and look at the anglo brewing and hoping to see the construction in less than two years how about those warriors. >> (clapping.) >> yeah, well it's real and coming you know, i know that for every one of you here as excited as i am to have the warriors here finally and certainly come home to san francisco

their eastern will anchor transmitter and retail hub for the vibrancy of the new neighborhood and pier 70 the rehab of the suit of historic building is underway by the development forest city we see 73 percent voter support to open up to park and shoreline new workshops and residents and administrative reviews space over 9 acres of open space connecting the port parks like the cove crane park first homes can open as early as 2019 and just south of pier 70 the 22 acre former potrero power plant is looking at mixed use development we have already working with n r g in innovative sustainable strategies that can be pilot along the site we're

looking forward to working with new owners to design a mixed use development that can reuse the onsite projection of pdr uses hunters point power plant pentagon is planning the removal of the hunters point power plant and part of site is underway and working towards the site by 2018 as part of work with the community on a long time redevelopment they're supporting neighboring like story core on an already remay be seated part of this site indiana baseline build inc. is clearing the way for 12 hundred more units of housing up to one million square feet of research and development a space the development will include significant waterfront that open space and right next door on our

own rec and park department they're developing a major public park hunters point candle stick construction is already begun on the executive park all the new development will intersect at the hunters point shipyard and candle stick i know utensil be up here in a few minutes talking the virtues of this i want to assure you the city is your partner not a compliance officer but a partner all right. >> (clapping.) >> ladies and gentlemen, 9 great neighborhoods everyone will deliver on the values and show us how to do development right in 15 years i think that colby wants it in less than 10 those projects will be complete this stretch of the city will be

living breathing project how we embrace the change and achieve the desires to after and every one of you help us create this vision and invest in that alongside the city and in the future and together we can make the southern bay front a showcase of san francisco ideas and historic values thank you, very much. nor letting me talk and be here. >> (clapping.) >> thank you, mayor ed lee is it so existing to envision how this comes to fruition thank you very much so much potential there so, now

i'd like to invite our panel of developers and our moderator italian-american is our managing editor monitoring the q and a with the discussion of panel lift practical welcome our developers who is a person if 5 point and here's jesse principal investment group and there's sophie and carl shannon director and michael senior project manager at the boston properties and rather than go into long bios i'll let jim lead you to there and give us a view in the projects and tim gardener our managing editor writs the you

don't realize you'll get to know jim take it away. >> good morning gentlemen and greeting your we'll give you a chance to self-introduce and show us the project you're working on in san francisco and we'll get into the discussion. >> okay. >> yeah. >> so my name is cove if i i have so much to say after the mayor's introduction i'm better off keeping my mouth shut (laughter). >> i'm the regional manager of the point for 11 years i'm concerned worked as lennar's key man developing the properties and creating this to be the largest massive community developer in california and get

to manage treasure island on behalf of of the lennar and this is a fabulous project if i might say so myself and 8 thousand homes about 4 to 5 commercial space and integrates open communities with the parks and really focuses on trying to create as much free speech from the auto as possible shuttle services and we're excited and what is important we started after several years of planning and yerba buena island is currently being prepared for the sites we hope to begin construction on in about a year from now now i'll say we're actively

engaged that the partner the mayor of the city on trying to attract the lucrative places here. >> (clapping.) >> absolutely i will say in addition to, of course, all the windfall attributes of san francisco we've reilly looking for the cultural center of bay area we look forward to that on the island so - an example i said earlier we're building the water transit system this is an extent of hopefully 6 years we're

talking about over one hundred thought square feet of retail not just entertainment but for the neighborhood and usf and also nine hundred and 80 thousand feet of office centered around a public plaza union square we're excited about all the opportunities that brings you guess in terms of the activating with the southern bay tour and the southern bay front

another project we're in the middle of construction one of the first investments bought the site in 2011 and in prior life it has been for a couple of different mayors looking at after mission bay and this is a bridge right at the gateway of mix bay and over two market sites that got developed we preserve that has a 5 room hotel too far from the moscone center to see that hotel and be successful we went about reentitling and converting to 6 hundred thousand and seeing a 50 room hotel sold to san francisco group like group offices developing that that portion we're partner c i m on the

construction of three hundred plus in the first quarter will will open not market and still - i'll give you my card but we're excited this gateway to along with the giants amazing project off the street the gateway to moab and the rest of the southern waterfront so the last project i wanted to mention briefing other part of town we're excited about this project and partnership with the local 38 union and the plumps trust fund on 3 acres of land they've owned for a long time on market street very close to the sf pond site between 12 and we're developing an amazing collection of 6 actually different buildings on the site one of the best most challenging parts that is the current sro on the site

the center hotel that guess actually with the mayor and staff did the work it is converted into a navigation center and we're excited partnering with our vietnam partners and part of this project addressing sort of the continuum how to address the city on one site 4 hundred units plus including the privately financed supportive of housing project with an opportunity for step up housing to take folks from kind of a shelter situation into staged housing ami with medium area income for the whole project for the affordable units is 45 percent we're very excited about this really pretty innovative partnering. >> thank you, michael. >> by the way, i just noticed

a quirk how many tackles so we're - >> michael with boston property responsible for overseeing the development activities in the san francisco region that is here as well as silicon valley and oakland with a regional project there a i joined boston property after 6 jars from the mayor's office the office of economic and office of economic workforce development a hard bill to follow the mayor and those guys and cut their teeth in city government part of your success and the partnering that you guys made with the city and your private interests and while at boston properties we like to think big when we look at the work with

treasure island and other works that jesse and michael are doing with the warriors trying to kind of makes us look like the small guys hard to say that boston is the new kid but relatively speaking in the developing wondering in san francisco we really have bought the embarcadero in so 973 million skwut the later landlord in office space and when the 24 hours are complete we will urban design that about two times started in the development business that is the dna of boston properties before i get two along probable made forward-looking statements (laughter) this is going to be on the quiz later and since jesse opened up the donald trump joke i'll follow in line this is a

forwards looking statement not a backward looking statement just real quick (laughter) i did not think i needed to expand on that those are the 5 core focused areas of boston area strategies we operate in 4 we on the best markets in the united states and so think to be 5 so that's boston new york and washington, d.c. and san francisco and now la we acquired a 1.2 million secret in the centers that is 68 percent lease but a repositioning asset so we're existing about the tungsz in that market again, the development is in our dna we looked at developed o developing and having a class a building in the core area with

the sub markets go major masturbates that's proven over time to deliver great economic performance for our stakeholders and really seeing the ups and downs we're a long time holder it is always greatest to hit a home run on mission we don't always do that we have a long time perspective we look to acquire we're a fully integrated operating platform with finance inhabitant and property management departments we have the best of the best everybody likes to say that but perhaps this is the exemption when you look at our key beverage throughout our leadership and exclusive leadership is thirty years of experience in the

reality industry with an afternoon of thirty years in boston properties a tremendous tremendous really great balance sheet anothers donald trump right there (laughter) we use huge, huge balance sheets thank you jesse (laughter) we just had one billion dollars in senior uninsured notes we expect to generate close to $950 million in that revenue we'll use to retire debt and refinance debt and fund the new development opportunities at less than 3 percent coupons excited and the final one we follow through whether a doesn't the to the city a commitment to our strarldz not most important but to our tenants we have some

of the best tenants we think in the market that are attracted not only to the assets we own but to boston property and it's commitment to service this also exhibited in people come to us when they have assets that they want to is where he happened that they don't have the financial development expertise to carry through we've been fortunate in the marketed and other markets to have attracted what we think are the best properties in those regions so again 535 is the recent building and found the market just right because of our crystal clear and bought the properties if you look at our entry into the development market we took 680 and 6 missouri fulsome from c n g we leased the buildings and they were going to develop that

and so that was a very ease entry into the market and the bought from budget committee can market and thrilled that in a quick timeframe and excited about that down the road from the tower adjacent to the sales tower will be our biggest asset the tall itself west of chicago and la they think they have the tallest building but have to put a big doom on top of of the building that exquisite a time also design they - this will mark the now center of downtown san francisco an important part of transbay redevelopment and

marks the location of the terminal we've excited it is 60 percent lease we're fortunate to find this development with the native salesforce to move their global hardest to the middle of mission and frerment and excited to have them as a tenants and other tenants in the live building and talking to 4 or 5 other tenants some of the leadership has promised 100 percent at lease when we on the building we'll be happen with three quarters it is a leased platinum building from the second story and finally some of you are looking for pace speaks a view from the 60th floor and come and see me we'll trade paper but what is interesting we

are on top of the form as the 50 floor and as part of marketing material we hired a guy to come out and drew up ever floor and the spin around one at the 50 floor a pam erratic when you play it on the screen they're the same and sometimes, we take liberty with martha we have still 11 floors to go above and finally this is a project 2.3 acres in the central soma neighborhood that the city is currently going through a zeroing and got on application we're excited to work with the city to refine the design of the plan as well as the community benefits this project can deliver and we're not satisfied with changing the reconciling once we did it twice i can see the building on the for ground

the salesforce tower in the background. >> (clapping.) >> carl. >> for those of you who don't know i'm carl shannon been with squire close to 14 years incredibly blessed to work here in this market to work in this city i don't think you can ask for a better mix of economic and the quality of life in san francisco and the opportunities it's been all of us have enjoyed as developers i'll just going to touch briefly on a couple of project that is one 60 fulsome we've been in partnership with ocii this is part of the mission bay redevelopment district

i'm sorry of the transbay redevelopment district we hope to borrowing later on this year the majority of land was the outlined embarcadero freeway right away h right-of-way and the city controls a large part we we were lucky to get control of the parts and hope to break ground at the end of the year this burglary have a total of 40 percent affordable in it so you know a unique projects are a unique combinations of the right zoning to make that work. >> this is one of the projects i'm most proud of the things we've done most of you don't think about this project as a

project but this is in coordination with partners i th

much rather hear jim's precociously questions so with that, thank you very much >> (clapping.) >> i guess the pressure is on michael just so he know to pier 39 you between jesse and - no shortage of issues facing san francisco development and i'll say we like to hit on a few one of them is prop c which raise the affordability residents on market-rate developers to 45 percent and supposed to be fleblthd there the city controller and various economists on the number is too high what's the goldie locks to make the difference on affordable housing but not to

stop the development in the tracks jesse you were in the room and cutting on prop c maybe you can start. >> sure so prop c we don't know is a measure on the ballot that calls for 25 affordable housing but one of the things that was done at the last minute the measure in tradition that talked about maximum feasible affordable housing talked about an independent spewed h study by the controller's office and a bill to fill in san francisco politics so that was a wise move something the mayor's office pushed for and the board that process so three percent is covet what exists today i'll say as a result of that since the market for residence and housing is covet lost right now did the only we're in the market

everyday that is difficult to tracks when 25 percent is the standard and the law part of this because landowner with used to a certain level of piping on the lands excuse me - can you hear me overnight essentially the level doubled trying to manage the expectations of land is hatred hard had is interesting as part of this the technical advisory committee were asked to serve on both sides the political aisle i think that was 8 from the mayor's office and 4 from the board and start finding with the advisory consultants with the century urban and we felt that a

guy names mr. code us surprising the committee unanimously found the consultants - we called for a range of an new inclusionary policy for rentals 14 to 18 percent and for sale from 17 to 20 not surprisingly i was one of the guys that said we didn't show you the - the lower end of the range keith was here we're arguing for the higher end of the rank the good news that was an extension on the range - what's that oh, here we go none heard anything i said oh,

>> all right. well anyways i'll repeat so 25 percent is the standard we have been unable to tract at that level and this lake market it locked up the controller's office recently completed a process with the technical advisory committee i served on with 7 other folks the good news various represents of the whole spectrum unanimously endorsed the controllers findings that recommended setting the level and 17 to percent for the other levels so we're in the range and end up on the board decides to adopt something in the range it is anyone else's guess i'll be in favor of starting at the lower

end of the range you go and also discussion about reaction percentage over time so that eventually you might end up at 25 percent but give the land market and frankly having the feature to push landowner to tract the longer than they wait the higher the inclusionary and the higher the evaluation i was encouraged i think that right now you'll probable see a gap in the if i'm we've stayed at three percent for sometime and you know into the future potentially but at least that was a sign of hope there you see something that will work for everybody. >> cart you mentioned tishman has more affordable housing than any other developer some up to 40 percent affordability is that is seen that prop c as written

is workable for developers or special cases. >> we believe strongly that we need to work together to build both market-rate and affordable housing and the only political way forward is to do both we as a city and we as a region have built a small fraction of the housing we need if you look at in 2009 san francisco we basically created 8 jobs for every housing take a minute and think about that. >> okay. >> 8 new jobs one new housing so if you have two wage earns obgyn there this is still 6 people with new jobs without new housing they internal revenue increasing density in the existing housing by doubling up displacing people who don't have

jobs or commuting in from outside the city or outside the region if you wonder why the traffic coming down from santa rosa is because we as a region are not building enough housing the key to this quite frankly from my perspective is to make a real commitment to affordable housing but also be willing to increase the density and that's where we have really applied in lumina and affinities made a commitment back to chris daily back in you know more years ago than i like to remember a 25 percent offsite affordable that is it went i can tell you the number of developers saying your throwing the industry under the bus 25 percent a mistake that

was part and partial of two 24 hours on the site part and parcels of the density so block one is a very unusual sets of circumstances and increasing the height from three to four hundred feet question thrive on doing the public-private partnerships to find a way to create significant affordable housing and significant market-rate housing at the same time, i think if we're going to build a cigarette amount of housing or having a requirement for significance affordable is important but being willing to increase density is equally important to make that work otherwise we'll simply shut down you mentioned that the jobs housing figure san francisco has

as you may know has been under providing housing for decades now, however, this year and next year a historic amount of housing coming online and rents are softening and others are falling are we moving the needle. >> it is a sign people in the city that don't believe that supply brings down pricing i think that is a sign that basic economics work; right? building new housing makes everything more affordable every resident that moves into lumina that didn't displace someone from the bernal heights or mission that's a win i think so is there a fair amount you know stuff in the market right now yes, a number of projects

that started at the same time but that product will be absorbed quickly frairmentd and other places projects that want to leap at the high rents a year from now all 3 of the buildings will be full; right? and even a wave of projects behind that whatever short time immediate is incredibly short time dynamics we're talking about has been in the works for decades and we may find short time leases we need to work towards long termer solution and that is building more housing. >> okay if prop c is the issue for housing development the elephant in the room for that's a donald

trump reference but is prop m the city is very close on the brink of running up against the 1985 development tafb that is even with a bunch of new projects sort of lined up and going into the pipeline everyone is looking for on sequester i don't think anyone's is come up with a great one and coffey you've got the do it yourselves a measure on the ballot for the 5 thousand square feet of office from the prop m cap hue it is that going and any powell how a clue of voters will react. >> it is going well, we have some powell the voters in san francisco will decide with use it is great wisdom in exempting the shipyard if the prop m allocation process

look we left with having 3 very significant citizens components on former supervisor sophie maxwell was on the board when this went through and remains a supporter the vice president of the school board shamann walton is a strong supporters and a proponent and he actually his through his company of young developers is a partner in creating the entry-level jobs in construction because on the shipyard he actually meets the necessity of keeping ongoing and the chair of the sins advisory doctor honeycutt is extremely

supportive proponent and has been the chair for years hundreds of meetings and we've experienced those they've as i understand on very, very quickly and primarily because they recognize that is as we execute the project we're able to deliver significant amount of community benefits prime communities benefits like jobs and creation of hundreds of acres of open space communities benefits that provide down payment assistance within the communities and but they need the volume that the city struck with us in 2010 was specific to move forward in the development and measure it in a certain way question obviously moving forward with the housing we now

getting ready to begin a significant piece of development of commercial and as it turns out prop m crease an artificial constraint that constraints with certainty how much development we can build in a year and immediately leads to the fact we can't he provide the communities benefits with certainties so it is all linked together an intelligent deal we strict with the city and me and michael and the other michael and your partner we sat down in a room and created an integrated business model to enable us to move forward with development and create jobs and create the benefits and would office space we believe when we explain this to those the voters and they release we created a wonderful opportunity for san francisco businesses that maybe be piped outlet downtown to move

to the south bay in an environment with transit i think it is becoming a great proposition for the city. >> you hired an office broker this week that's a sign you think that is going to go through. >> i'm an aerobic. >> you mentioned this is the largest property landlord in san francisco and building the single largest building front 200 underway in the city so that portfolio is prop m an issue or an issue of all the other guys. >> as i said development is in our dna from the selfish stand point yes capping down on supply helps us but not what we're in

it for we're in it for the longest and the rising tide is a met for on sea level rise but the of behalf what is best for san francisco and best for us long time is a market based approach to develop artificial limits you have to let the market direct growth in the city obviously policy has to inform that but at that time, the city is focusing growth in areas and expanding rightfully so the development deliver the communities gins whether affordable housing or parks and open space all of the things you see in the larger scale massive plans we talked about earlier are in central soma their 5 key

developments sites in central soma that are all going to be entitled more or less at the same time over 10 million square feet of demands, if you will, of per diem and there's about 5 hundred square feet less; right? so the city is asking developers to take on those streerldz benefits if you will, and it the little right thing to do but in recognition of that those projects ought to be able to go forward so it is smart and where we should be directing affordable housing in east san francisco sorry for anyone else but this is where growth belongs the future of development i even there needs to be a recognition that again, all of that 10 million square feet plus may not go forward because of the what

the market will do is not goes forward at the same time but many of us on the panel and in the audience are proponents of those projects that we are going to try to deliver to the market and if we're unable to do so we may miss the next cycle and make the decision not to develop and use jesse's met for a log on unintended consequences those beautiful, beautiful huge public benefits they'll not be dwlifrdz because their tied hand in glove; right? as we move forward with the development the city gets what it wants the improved infrastructure has to happen to death. >> jesse on central soma you were involved in the discussions to look at was to metrological prop m

it is - the discussions were not successful what killed them and you can say you. >> flex question (laughter). >> following what michael was saying there is probably more than 10 million for an annual allocation for the square feet and this is a map that is 12 years of projects to get the allocation and for context 10 million square feet if i look at the jobs the amount of affordable housing that that 10 million feet is equivalent to the housing bonds that people passed a few years ago that was

done without a partial tax into the general fund this is one of the facts that 10 million fee generates we're talking about the transit development fee you're talking about school fees and everything else outside of the fee structure probable $10 million of the benefits that a project - we own a site in central soma and we're probably well hidden everything else because we brought our site up later but as part that have we look at the prop m situation something that if we can wrap you are minds around willie brown, jr. tried to put a compromise together and we tried to look at the fact we've seen

on november in and on a election in 2017 and again in 2018 so coffey was smart enough to go to the voters with signatures we tried the other way to go through the legislative and political process and we were not successful probable not better to say why in my mind but one of the lessons from it and we were working across the aisle with folks in soma that were on the elected side and come up with a reasonable approach i think you know from my perspective you know one of the things that is important about any future efforts if there is one we have to do a job of educating people about the benefits front loaded through prop m but the true kind of global impacts of constraining impacts that carl

mentioned the supply being a good thing where supply ended softening rents we are leveling off and seeing that on the residential side i worry about what happens in the fabric of san francisco not the residential population going forward but composition of businesses in this town and you know as an owner of a great office building in oakland's we were the beneficiary of the tightening office market in san francisco when we bought our building a couple of years ago we had one and 5 tours from san francisco by the time we leased the building we were seeing 4 to 5 companies those are architecture firms and nonprofits and the sierra club you know arts

organizations they were all being priced out of san francisco i think in is making are level not just about sites over gentrification but maybe really a turn on that and say what are we are doing to encourage the small businesses and nonprofits and arts organizations and those groups that are covet key pieces of the economy and prop m didn't help. >> yeah. >> i think those are excellent points i couldn't have said that better (laughter) but absolutely i think right on this is more than just sort of what people see as office space this is really about the ability to sustain and create spaces and office spaces for small business and the nonprofit and clearly the lands downtown is getting very expensive and really this

important for us to generate those opportunities informing o for those smaller businesses and the arts organizations to have a playing place to stay in the city for the diversities we cherish and prop m can create an artificial constraint and the politics the sciences of politics trumpets the politics in half and does exist and even in san francisco. >> even in san francisco. >> so i think this is a very key key key point we should be thinking about and it is hard for me by the communities can't come up with a way in a gwen way to discuss with policymakers and politicians our friends on the left to understand this is about all of us growing together it seems like it the the battle for

the developers and everything else but it really isn't i think central soma which is mentioned here is certainly san francisco's next big development the hot spot sort of mission bay and central soma is the potential for the coming next couple of decades three or four of you we've heard about projects jesse and carl i have more than one your keying up for central soma and were working on two projects on fourth and townsend and kitty-corner from the train station and fist and brandon and working with michael in la on the second we're very anxious to see the i went for central soma get published are here shortly you know from my perspective the

rezoning around the straug i central subway make sense with the transit should be a sixth provider not only of housing but fortunate for jobs you look at the downtown core and virnlt all the sites that can be developed in the censor stwlrs not really capacity in the downtown for so central soma provides large sites you can do large buildings in a mid-rise scales this attractive for the tech communities and we think that central soma will be a great part of the city in the years corinne woods. >> unlike mission bay the transit is coming either before or along with development rather than after transit fees tends to be the key to everything these days in talking with the

developers everyone is trying to get near to transit as they possibly can my question this is for anyone up here when you look at specifically san francisco transit i mean really in part in particular in their marked out 2, 3, 4 capture whether the improvements and priorities we need to have for transit gordon's to enable this development and enable the quality of life and more to the points who and how are we're going to pay for them anyone want to take a crack. >> so you know, i think all of the smart money many moving to san francisco kind of the objective place our sites is one block away from two state hospital on the central subway and over planning in this instance transportation infrastructure is heads of new development that's a great win

transbay you have the same thing as time and literally our building opens you think within months of the transit terminal the second phase of that project bringing the caltrain from the current location of fourth and king is an important part of that story but we love to be on top of next to transit not just here he know i'm not supposed to talk about oakland's we have a seat 2, 3, 4 oakland on the bart station where 10 second walk from the 10 second walk from bart's make sense the wave of the future you hear all the talk of awkward uberers the driver also cars that will continue to

happen and bring scars off the road and people in automobiles but transit is the wave of the future whether it ferry or treasure island i think we need to explore all modes of transportation and look at all the transportation in san francisco we're not new york; right? with the subway but we have really great extra that is either your respect bart is merced lake outburst we may end up waiting that needs to be solved the question of funding is the 64 billion dollars question where is the money going to come from i think that transbay redevelopment area is a great example of ma'am, missing project development to you know not funding all the infrastructure and can't can't

afford it but the site that the city was able to put up for sale is supporting it and the ongoing assessments that all the property owners will pay that the city can bond against that helps the next wave of funding and then state and federal in the instance i'll let coffey jump in at hptd and treasure island an open book negotiations between the city and developer and there is a fundamental understanding of economic feasibility of what benefits the project can provide by the city is very strong in both cases about maximizing those developers and pushing the developer to the edge allowing the developers to generate the returns it needs to procure the investment in the projects but in the case of treasure island all the infrastructure is comping online as the

market-rate and affordable housing it is a similar point of view and ongoing subsidies i think that market-rate development has as piece in there but also public funds that need to come. >> this is interesting he realized that sitting in our seat those two gentlemen pushed mayor ed lee up against the edge they're on my side of the table how do they feel (laughter). >> we have a rearraigning the seating. >> i'm kidding but seriously on the issue of transit for me very simple it is bought, however, many times as often as question, we need to build and especially to the south bay front i leave that up to the engineers and they're smart we have to do it and finish the

transbay terminal and use it base that we have and increase the amount of water transit i mean ferries are wonderful but not enough we have to use our transit system and improve and sxandz it as soon as possible and have to get connect jobs to housing wherever the jobs and heirs may know and transit will go those things we have to do. >> i'll make one point to follow on we've seen the tech companies come to san francisco in part they want the thirty something engineer but also as stretches and muni and bart are the transit first infrastructure in san francisco is so far superior to what it is in the bay communities particularly those in south bay if you

populate that building 6, 7, 8 thousand those people arrive by bart and bikes and that works if you populate a building in north bayview at 7 or 8 thousand run the biggest business service in the world because you can't put the scars on the road there's no room for people to park when they show up at mountain so as transit becomes more important san francisco wins relatively speaking san francisco and oakland win relatively speaking to whether the city in the bay area because of the density of the at the time of trial offices they offer. >> so all of you despite our views have been around the tracks of san francisco development and politics for

some years let's just say and many case on multiple sides of the table how do you just we had an election whatever in san francisco that resulted in change of controls for the board of supervisors how would you recreate the political climate in san francisco he'll take anyone that wants to jump. >> i'm happy to take it. >> in san francisco since 2009 go residential rents are more than doubled what they were and something like 89 percent of san franciscan. >> nobody, nobody income is up 2 and a half times okay. so you've got a huge cross section

of the population that is concerned concerned their good evening to be priced out concerned they're going to be evicted, concerned you know not going to be able to stay and enjoy the san francisco that they've come to love and who do they talk to they talk to their elective represents there is a feeling we need to make many stop; right? that's the political backdrop what he heap people will understand is if the developers are economic folks and if we don't allow for additional growth that jaw makes the problem worse. >> we want to partner with those people and build affordable housing and quite frankly to do what we can those things make the office more expensive but need to - the

solution here isn't to stop development the solution from my perspective is smart but the political backdrop that is you know even the voters that worked he everybody that lives in the bay area is concerned about the cost of housing and the traffic industry that's why we see rent control measures on several cities on the ballot here. >> i'll add an to that there's a lot of focus you would all open different sides and bodies of the policies table their with an in the same in san francisco land use policy and there tends to be a hyper focus on the city as people change seats i think we need to pub pull back and

look at a larger regional perspective not just san francisco but all the community abag and others coming together all the transportation agencies have a place at the table not just who is sitting on the board of supervisors who the mayor is that's within part of it and but we need to have a larger regional perspective how we're delivering transportation are we all meeting our housing goals and the capital what are we are doing before ceqa if you don't have a lawsuit in your schedule in your performa every large developer project is going to get suited; right? it's the environment we're in that development means gentrification go those developments get

approved an exhaust planning many years of outreach to the communities incorporating their feedback. >> eir study spending moeflz we end up getting sued and another two or three years in the process that's not good for anybody so this is something systematic that we need to fix. >> i served. >> capture of mayors willie brown in the 90s and saw the kind of the wave there when tom ammiano and the change to the collection of chief ping-pong ball continue supervisor peskin and mayor newsom in the mayor

newsom's first term not different from the eras and everything is still getting done land use in san francisco the context sport has been and will be fun it is mraelgd at the same time not for the faints of heart but still a city that can do that raise and i'll say having the had the opportunities with this business to working around the bay notwithstanding all the frustrations of the political process a very deeply professional and specific data of structure for people that work for the city why it is ocii or connective development or planning or other agencies support they're really good deal makers and good deal makers on the board of supervisors so we managed to get

it done it is brutal and never get everything you want but it works. >> briefly i think once you acknowledge the fact that we have combangsz pressures on growth in areas that artists really ready to accept that growth and without more density we can't get growth in the areas we can accommodate there obviously pressure on politicians you're right the city is facing the issue head on and things happen from the outside and sometimes, we have benefits but the city will find it and we are ready to partner we're ready to try to cut deals and ask everybody to pay attention to the math. >> we've got time for one more question this morning i want to put it to all four of the panel

i was in san francisco over the last 14 years in terms of it's landscape it is trofrmdz and mission bay and mid market and the cultural renaissance of major public buildings there is no reason to expect the next 15 years will be less impactful on the future what's a couple of the game-changers on the grown in san francisco for the next 15 years each of you then we'll bring to a close. >> i believe that the transbay terminal and the ability to bring high speed rail into this town will be a game-changer i hope it happens i think that is significant. >> i think coffeys project is one of the most transformal

projects on the books and going forward this is an honor to work on that project when i came to work for the city and negotiated with people like amelia when you think back to the base closures and the fact that san francisco inherited a 5 hundreds acre military base not two along and their troofrmdz it is basically incredible to the neighborhoods it is exciting for the remarkable achievement but the shipyards and the transformative impact for bloirpt that be one of the most significant opportunities for the next decade. >> well, i have a bias towards

spending 6 years working not to take away from all the collection of 9 projects along the southern bay frntd but arguably together will be more transformative than treasure island but i think that project has as of the shipyard and candle stick point got all the things we've talked affordable housing and transit and parks and open space and hopefully, the george luke museum an attributiontion people go through the ferry building and 39 and shopping space with the best of san francisco so that's an the public extra it is for bayview for the high

speed rail and hope of hopefully, will happen in the next few years. >> we like to talk about brick-and-mortar the biggest change in san francisco the economics soul of what drives the city i think about the city i came to tie in the early 90s and it was all about bank of america and wells fargo and some others and san francisco has been transformed san francisco together with silicon valley has sort of two hearts in the economic center for technology economic going into the 21st century you look at the firms that will drive worldwide and how many are headquarters within 50 millions of where we sit hardly within two miles anything that is a remarkable transformation half

of the money goes through the bay area - i think that will change things in the very positive way and provide huge growth for us in the years going forward if we don't screw up (laughter). >> >> (clapping.) >> oh. >> thank our panelist and i'm going to turn it over to mary, huh? to bring to a close one-half left you more networking time thank you for the panelists for the thinking and hope we can work together to continue to get some of the solution that have been talked

about today i want to thank again, our title shepherd mullan and hathaway dinwitty and he nell carpenter and the smith group and all of you a huge round of applause for the speakers we live in a great, great city thank you, jim gardener and city hall stick around for networking about 2 y

of this property put this building up for sale. i talked to the owner, i said please, give us a chance. maybe we can come up with the funds to be able to have this building for our children and families. he is here today and i want to thank him for not keeping the building for sale. [applause] i had no idea what i was going to do if the building was sold. 224 children and 32 employees, where would they go? where would i-i didn't have no place to turn to. there are no childcare facilities available in san francisco for this many children. what was i to do

after 45 years providing child development services in the community. this didn't just starbt 2 years ago to get the building, we started over 10 years ago trying to gret the building. when i heard mayor lee was concerned about mcc, he called me to his office and then had hope this would happen. mayor lee is here today because he cares for children and families. he has shown-he told me we will get it done and i am very proud of him. i also want to thank [inaudible] who is the community advocate for his help. he started 10 years ago to help me try to get this property and worked with our board of directors and

families. we will never forget the mayor for making this possible for today. today is a great day and it is about children and fmlies and nothing else, that is what it is about. and want to introduce the mayor oof our city of san francisco, our great mayor of the city of san francisco. [applause] >> thank you. thank you joe. you know, you said just a minute ago that if you lost the center you wouldn't know what to do, well i need to make sure you know the same thing that if we as a city lost the center we wouldn't know what to do. you don't have a center entire city that serves 224 families and want to thank supervisor avalos for being here today as well.

this is happening in his district. this is a jewel not just of the excelsior but the entire city. i have made a promise a couple times in the past year, year and a halfism . one is when many individuals and family leaders, organizations and elected officials stood with me to say that when we passed our proposition c a couple years aknow for family youth and children, we made a promise to make it easier for families to more than sur vive to actually succeed here in our city. and, in that reflection it was our education, our unified school district working in consert with all of the organizations like first 5 and foundations and partner ships that we

wanted to create to welcome our families. i made another promise this past summer when we hosted the womens summit and i stood there on the stage with mayor libby shauff and proclaimed things we would do for the cities. she made promise to make micro loans to women owned business squz she did that in front of everybody on the phone. i didn't have that technology with me at the tame because i promised to make childcare expanded in the city and more affordable but didn't have a app to do that. i made the promise if i have any opportunities to expand chile childcare facilities particularly for working families i will make every effort to do that. so, today it really is to help me fulfill a couple promises that i have been making throughout the city

family, but also to suggest to you that, this particular promise is a lot more complicated because while we have provided the owner of this building who is by the way, housed this childcare facility for many decades and it is in that appreciation we came to the opportunity that it did take the city family with supervisors working with my office, to took a lot of other department heads from our family youth and children, to took the hellman foundation to stand up and know the hellman foundation is here today and will speak about the gaps we are identifying do make sure we are able to dothis. it took organizations like first 5 and low-income investment fund to help figure it out with all the other different departments. but it also took a history of

how people in families out here that were committed to this center working with us to say how important this was to them and to the entire city. all working together we figured out and today we are announcing that mccc the mission childcare consourceium is the owners of this building by years end. [applause] and i look forward to when the owners hand over that little deed that you have been holding on dearly, that you know longer have to receive propositions from other people who may want to buy the building , but you can rest assureed the city and you, we did the right thing and it is always about doing the right thing and that

is to preserve this center for hundreds of more families. this is not only a childcare facility, it is actually the go to center for preschool probably throughout the whole city. people love it here and guess why it is great facility and safe. i was welcomeed in by all most 50 kids singing in spanish and in chinese. a welcome to the center and this is what working families are in need of. i can now say more confidently that not only has this village of folks that come together to procure this building, what it mean tooz the families for years but i also can say that our city will be there for more families and this gives us the in ursha what

you have done at the center and non-profit bord of trustees have done. if you can make sauch such a commitment to by rg the building, we have been trying to teach that to a lot of historic non-profits ipthe city. take to the opportunity to work together with the city and not a victim of our own success, let's be a recipient of prosperity by figuring out with the non-profit partmers and city agency squz board and mayors office how to make sure we can own these buildings forever so that the programs we value are no longer being subjected to the economy, we are actually part of that economy for many families. and, you don't know how important it is, because i think that as a mayor helping to try to create more jobs,

people cannot accept the job responsibilities unless a few things happen at the same time. affordable housing, transportation and childcare. these arethis that must happen for a family in order for them to work themselves beyond poverty and into a success and this is what we are trying to do with all the ajepda for the city is have the agenda for the entire thing take place. so, childcare is a intgle part of it and really happy that this happens but we got to do more and will do more and this gives us that foundation. with that, i want to say thank you to the randy, the owner and joe, your leadership and someone eged me on, more than egged me on, he is a strong advocate for this to happen and xoe why. and

that is [inaudible] thank you for be aggood resident of the city and activist but more importantly for being a steward of this particular building and making sure it happened. in my office he has been advocateing this for a long long time because he knows how important this day might be and it is important not just for the families here, but i think it is a foundation where the way we have to do business. if we are a job creating city, we have to help people get those jobs and maintain those jobs and that means, at the same time, we will build more affordable housing and get that project up and going hopefully supervisor with your leadership as well for the next few months up there at the balboa bart station next to it , we need that and more land to build more housing. maybe that vacant thing next door

could-joe maybe we can start talking about that. we can't have vacant buildings in our city go untouched with all the needs we have to have, so i want all you to promise to work with me. let's go for the next one and do the right thing and do the good things of affordsability and mead the challenge head on especially at a time with the prosterity is strong, let's get to every family that deserves it. with that, let me introduce the guy that is bugging the head out of you and now gets to bug you [inaudible] >> thank you, mr. mayor. i will be brief. in many ways i can't fwleev we are standing here. joe, thank you for your continued effort and dier-we were in dier need. if this building had been sold, if the rent had been increased, you tell me where in san francisco

you can fine 25,000 square feet for 224 low-income families? so, i'm holding these petitions because we started this and many people in the crowd here today, neighborhood leaders, i'm not going to name you because i would probably forget somebody but will name some of the organizations. the excelsior district improvement, outer mission merchants and resident association, the two lindas they are part of multiple groups. cathy, , alharris, may wong. avenue wn was a part of this and in the tradition of the excelsior district improvement association when they had a neighborhood revolt they started a petition. we are a neighborhood of petitions and having our voice heard at city hall so we gathered hundreds of signatures and said help us

save this building and took them to the mayor and the mayor listened and he got the hellmen foundation and northern california loan fund and low-income investment fund and office of early education, part of hsa rks mayors office of ecujnomic and workforce development. a lot of the folks staning boo r behine us here. this institution is the largest subsidized childcare center in the entire city. the largest. and this man and this owner came together, we negotiated a final purchase price and here to tell you we have a signed letter of intent. we signed it yesterday afternoon. thank you rea rudey for agreeing to sell this building to this non-profit and thank you mr. mayor for your leadership and support. there is one other person i want to

point specifically and that is a candice wong. she is in the fight for 10 years specifically staying consistent with this building and her support. i thank the parents and all the children and that is what this day is really about. thank you, mr. mayor. >> thank you, joe. [applause] >> thank you mayor and thank you ausha. i want to present-we have to fill the gap and rather large gap. it took a lot of people to help and i want to present susan hursh from the hellmen foundation. >> [applause] hi everyone. i'm susan hursh and ceo of hursh and associates. we are really

honored to manage the hellmen community philanthropy and this is what it is about. i look and think about the issues so important to this foundation. the leadership, children, community and clabilation and so joe, mr. rudey, mr. mayor and all the departments who preely work to make this happen, it really is a micro cosm of what can hap pen in san francisco. our future is so important and investing in this early stage, early care and education in a quality way makes difference. to have this [inaudible] families who care it really should be a beacon for all the things we in the city can do so thank you very much. [applause] >> thank you for those wonderful words, we couldn't have made it without this foundation. now i want to introduce a parent who has

worked very hard with me for over 7 years. she is on our board of directors. she attends all board of directors meetings. she attends parent meetings. we have a great parent. very well organized parent meetings i should say. we keep our parent involved. i want to introduce andrea panky. [applause] i'm stand up here with you to give you support because of all the support you have given me. >> thank you. hi everybody. i'm going it keep this short and sweet. i have been on the board for 7 years and i have watched countless grants go out, countless fund raisers trying to raise funds for school squz community, as a parent and as a community

advocate i'm proud to have a home. i'm proud we dont have to no longer look for places for our kids it go. we are no longer struggling. we are at peace in a way. i want to say thank you mayor ed lee for all your support and i just on behamp behalf of the kid, the families, the community, dist licate 11 i humbly thank you so much. >> thank you. [applause] thank you so much. we have a yellow sheet going around thanking those who were part of making today possible. when we first joined first 5 preschool for all, it made a big difference in our program. i'm so proud of lisa who is here today. she has helped us tremendously. we

have a great coach, casey. and our consultant jacob, is over there. i can't forget how much they have done for us with first 5. and now, to conclude and end this session, i want to present the mayor a child would like to present the mayor an official mission childcare t 37 t-shirt. [applause] one at a time. one for the mayor. and one for our community advocates asha, who has been working

hard. [applause] it is amazing how much children learn and we also learn every day. i want to thank everybody who has been a part of making today possible. it is a dream come true. thank you. [applause] --------------------------------